The Single Resolution Board (SRB) published ‘Minimum Requirement for Own Funds and Eligible Liabilities (MREL) Policy under the Banking Package’, along with a statement responding to some questions raised during the consultation from 17 February to 6 March 2020. The policy covers MREL requirements for global systemically important institutions (G‑SIIs); changes to the calibration of MREL (including MREL based on the leverage ratio); changes to the quality of MREL (subordination); dedicated rules for certain business models, such as cooperatives, and for resolution strategies, such as multiple point of entry; provisions on internal MREL; clarifications on third-country issuances; and, finally, how these changes will be phased in.  

The 2020 resolution planning cycle will be based on the new framework, with MREL decisions, replacing those issued under the previous framework, to be communicated to banks in early 2021. Each new decision will set out two binding MREL targets, including those for subordination: the binding intermediate target to be met by 1 January 2022 and the fully calibrated MREL (final target) to be met by 1 January 2024, according to the transition arrangements in the revised Single Resolution Mechanism Regulation.

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